Wolverine Clean Energy Venture

The Wolverine Clean Energy Venture plant – was a proposed 600 megawatt (MW) power generation units – which would have been located at the bottom of the world’s largest limestone quarry. It was proposed by Wolverine Power Cooperative, a consortium of six Michigan power cooperatives.

On May 21, 2010 it was announced that the Michigan Department of Natural Resources and Environment (DNRE) denied Wolverine Power Supply Cooperative’s air quality Permit to Install application. The decision followed a review of the permit application under state and federal law. The Michigan Public Service Commission had advised Governor Granholm that the proposed plant "is not needed" and "would result in an estimated rate increase of $76.95 per month for the average Wolverine residential customer." Based on the Michigan Public Service Commission advice, G. Vinson Helwig, the Chief of the Air Quality Division, denied the permit for the plant.

On Feb. 11, 2011, the Department of Natural Resources said it expects to approve the Wolverine Clean Energy Venture. In separate decisions in December 2010 and February 2011, local judges said the DNRE couldn't legally use "need" as a factor in deciding or denying air permits.

June 2011: DEQ approves Permit to Install
On June 29, 2011, the Michigan Department of Environmental Quality announced that it had approved a Permit to Install for the project. The Permit to Install had been denied in May 2010 due to a failure to demonstrate need, but the Missaukee County Circuit Court ruled in January 2011 that lack of need alone was not a legal basis to deny the permit.

May 2010: State regulators deny Wolverine power plant air permit
Press Release from Michigan Environmental Council

Michigan residents and businesses will be spared astronomical rate increases after the denial of a permit for the Wolverine Power Supply Cooperative’s proposed new 600 megawatt coal-fired power plant in Rogers City.

The Michigan Environmental Council (MEC) applauded the decision, announced today by the Michigan Department of Natural Resources and Environment (DNRE). The DNRE denied the permit on the grounds that Wolverine had not demonstrated a need for the plant, nor fulfilled its legal obligation to consider other alternatives.

A finding from the state Public Service Commission staff estimates the new plant would have increased electric rates 59.7 percent. That would cost the average residential customer an additional $77 per month.

“It’s the 21st Century and we have plenty of less expensive and less polluting alternatives than another coal-burning electric plant,” said MEC Energy Program Director David Gard. “It is heartening that the state has committed, in this instance, to examining a broader range of energy options that better serve citizens and protect ratepayers.”

Such dramatic rate hikes would mirror the situation in another part of Michigan, where new coal plants have resulted in sticker shock for ratepayers. Electricity co-op customers in the Western Upper Peninsula are being hit with a 33 percent increase in electric rates due to $2.3 billion spent on a new coal-fired power plant constructed by WE Energies.

“In the U.P., and across the nation, ratepayers are discovering that coal is no bargain,” said James Clift, MEC Policy Director. Today’s decision opens the door to cleaner and less costly energy options that help put Michigan’s manufacturing base back to work.”

Michigan residents and businesses spent $1.36 billion in 2008 to buy imported coal. That money would be better spent on Michigan manufacturers and companies that build wind turbine components, solar panels and energy-efficient products and systems according to Clift.

Gard said that better, more cost effective alternatives to new coal plants “include greater energy savings through efficiency and more renewable electricity generated right here in the Great Lakes State.”

Earlier this year, one dozen environmental groups filed comments with the state’s Public Service Commission regarding the Wolverine proposal. The groups raised issues regarding the adequacy of the analysis conducted by Wolverine, including its failure to maximize savings its customers could realize through energy efficiency and renewable energy programs.

September 2009: Public Service Commission questions need for plant
The Michigan Public Service Commission, the governmental body that sets electrical rates and compensation for the state's regulated utilities, issued a finding that Wolverine Power has demonstrated the need for a new coal fired power plant. According to the PSC:

• Wolverine failed to demonstrate the need for the proposed facility as the sole source to meet their projected capacity. In particular, long-term purchase power options were not fully explored as part of their analysis. It should be noted that the majority of Wolverine’s long-term projected capacity need is based upon the expiration of power purchases (540 MW) on or before December 31, 2011. Wolverine has presented no evidence that the capacity currently supporting this existing contract will be unavailable in the future.

• Staff notes that the proposed CFB plant is one alternative out of a range of alternatives that may be used to fill the projected capacity need. Other alternatives that may fill all or portions of the projected capacity need include; energy efficiency and load management; renewable resources; or a combination of a number of alternatives that could include lesser amounts of purchased power

• Further given Michigan’s current recessionary condition and uncertainty concerning the time frame for recovery, Wolverine’s forecasted demand growth of approximately 2.0% appears questionable, or optimistic, and the risk associated with this uncertainty was not fully addressed

The report called the proposed facility "one out of a range of alternatives for Wolverine"

In a statement,, Wolverine Power Cooperative CEO Eric Baker responded to the report. "Wolverine disagrees with the MPSC staff’s assessment of our electric generation alternatives document. While we agree that energy efficiency and renewable energy are important components of Wolverine’s future power supply portfolio, Michigan must build new base load generation to replace its aging power plants, which are among the oldest in the country.”

Press around the state have reported on the development:

http://www.crainsdetroit.com/article/20090908/FREE/909089964# http://www.snl.com/Interactivex/article.aspx?CdId=A-10022238-14644 http://www.detnews.com/article/20090908/BIZ/909080412/1361/Report--Michigan-won-t-need-new-coal-power-plants-for-13-years http://www.wwj.com/MPSC--Coal-Power-Plants-Not-Needed/5171174 http://www.freep.com/article/20090908/BUSINESS06/90908047/1202/RSS http://www.wilx.com/news/headlines/57924247.html http://content.usatoday.net/dist/custom/gci/InsidePage.aspx?cId=livingston&sParam=31554545.story http://www.uppermichiganssource.com/news/story.aspx?id=347607 http://www.silobreaker.com/mpsc-coal-power-plants-not-needed-5_2262585352738832385

The PSC issued a press release: http://www.michigan.gov/minewswire/0,1607,7-136-3452-221399--,00.html

DNR says it plans to approve plant
On Feb. 11, 2011, the Department of Natural Resources said Holland's Board of Public Works can build the James De Young Generation Station Expansion, and that it expects to approve the Wolverine Clean Energy Venture. Both plants had been denied air-quality permits last year under an order issued by Gov. Jennifer Granholm, who ordered the agency to assess the need for new electric power and whether there were ways to produce it other than coal, which produces greenhouse gases and other pollutants. Both plants failed the need test, and the state found that the new plants would raise customers' rates. The companies appealed and, in separate decisions in December 2010 and February 2011, local judges said the agency couldn't legally use need as a factor in deciding air permits. The plants still must meet new coal regulations from the Environmental Protection Agency that took effect Jan. 2, 2011.

Background
On July 20, 2006, the Presque Isle County Planning Commission approved a special use permit for the project, with a vote of 7-2.

On June 1, 2007, Wolverine formed a citizen advisory group for the project, holding a meeting in Rogers City. On Dec. 6, the Wolverine Board of Directors approved a development budget and selected a development team for the project.

Wolverine Power Cooperative is currently evaluating a site in the Rogers City area of Michigan. They have recently installed a meteorological tower (2008) to record weather data to help determine their location for the next 18 to 24 months. The plant is intended to be complete in 2012.

In January 2008, an economic analysis of the plant found that Wolverine would have to more than double its electric rates if the proposed new facility goes into operation, and that new conservation and efficiency programs will decrease demand for electricity from the proposed plant. The Air Quality division of the Michigan Department of Environmental Quality (DEQ) is still working on a draft air permit for the plant.

In August 2008, Wolverine Power Cooperative completed its air permit application by turning in MACT determinations to the Michigan DEQ. There is no projected timeline for when the draft air permit will be issued.

In October, 2008, 600 citizens showed up for hearings on a preliminary draft permit for the plant. Most appeared to favor the proposal, but several spoke in opposition.

If the permit had been approved, it would have been the first approval of a predominantly petroleum-coke fired, utility-scale power plant in the state. Pet coke is a waste product from oil refineries. Although cheaper than coal, it has even more environmental problems, containing more toxic heavy metals, generating more toxic ash, and emitting more sulfur dioxide and nitrogen oxides, which cause a number of health and environmental problems.

In March 2009, a new website for co-op customers was launched, Co-op Conversations.com which will speak to citizens trying to break the stranglehold of 19th century coal technologies on rural electric coops. According to the site, "Co-opConversations.org exists as a tool to educate cooperative members in Michigan, and beyond, about potential problems that exist today in some co-ops right here in America. The question every co-op member needs to ask is “If I am a member-owner, would I risk my hard earned money this way?”

On February 3, 2009, in her State of the State address, Governor Granholm asked the Michigan DEQ to halt the permitting process for seven proposed power plants, pending an analysis of Michigan's future energy needs and clean energy alternatives.

On April 7, 2009 the Michigan DEQ formally requested that Wolverine Power Cooperative submit an alternatives analysis to the DEQ. The DEQ estimates it will issue a final decision on the air permit in the last quarter of 2009.

In June 2009, Wolverine submitted its analysis of alternatives to the proposed coal plant. In its report, the co-op identified biomass as the most preferable alternative, saying the plant could meet about 20 percent of its fuel needs through biomass combustion. The Michigan PSC is taking public comment on the Wolverine plan. Critics have referred to the Wolvernine filings so far as "fluff". The report may be accessed thru the Michigan Public Service Commission.

Critics maintained that the analysis offered little in specifics, did not adaquately consider alternatives to the plant, did not correctly assess the impact of lowered natural gas prices, and over-estimated the rise in electrical demand, in light of Michigan's economic challenges. Now a new report by Synapse Energy Economics has provided a detailed critique of Wolverine's analysis. According to thereport,"Wolverine badly underestimated the cost of building and operating its proposed coal plant and significantly overestimated the cost of using more wind energy, energy efficiency, and natural gas to meet its customers’ needs."

On May 21, 2010 it was announced that the Michigan Department of Natural Resources and Environment (DNRE) denied Wolverine Power Supply Cooperative’s air quality Permit to Install application. The decision followed a review of the permit application under state and federal law.

“We in Rogers City are profoundly grateful for this decision,” Jean Veselenak, a resident of Rogers City said in a statement. “The cost of Wolverine coal would have meant diminished health, diminished economy, and great injury to our environment which sustains our lives. Wolverine must now put its head to the real thing; wind, solar; and new technology that already exists in Michigan. Our families deserve these jobs and their health after long promises.”

Stupak Cautions Governor
Representative Bart Stupak, the democratic House member whose district includes the Alpena/Roger's City area, wrote a letter to Governor Granholm, cautioning her that without timely approval of the Air quality permit for this project, the state might lose out on government research funds. According to the letter, as reported in the Bay City Times, "the project received a $2.7 million federal grant in October for an industrial carbon capture and sequestration project to accompany the proposed plant. An additional $147 million in federal funding for the project is possible if the Michigan Department of Natural Resources and Environment issues the permit by March 31." "“While we must invest in our state’s renewable energy sector, we cannot do so at the exclusion of power sources currently meeting the energy needs of businesses and households in our state. The plant in Rogers City would not only meet these needs, it would be cleaner and greener than most existing power plants in Michigan."

Citizens Comments Filed
On July 8, comments were filed with the Public Service Commission in regard to the “needs assessment” portion of the feasible and prudent alternatives analysis before DEQ.

DEQ Testimony
On January 6, 2009, citizen testimony before the Department of Environmental Quality attracted widespread media attention to the coal issue.

The Detroit News, The Detroit Free Press , Associated Press , Lansing City Pulse , and Michigan Public Radio all picked up the story.

Of particular value to activists, the comments prepared by the Environmental Law and Policy Center, which are available online, and serve as a useful model for those wishing to comment in future DEQ proceedings.

In addition, several key TV stations ran original stories on the issue.

Executive Sounds note of Caution
Wolverine CEO Eric Baker spoke to a group of 50 community leaders in Rogers City in early September, 2009, and sounded what seemed to be a note of caution about the project.

"The next three month period is going to be really telling for our project. I think we will have a good idea of what the future will bring and if we get to the next step. The next hand-wringing exercise is ‘is this a good deal, now, and should we do this and put all this money at risk,” said Baker, according to the Presque Isle County Advance newspaper.

According to the paper, "Baker said key to a possible next step, which is a decision by the Wolverine board of directors, is receiving the air quality permit now pending in Lansing at the office of the Michigan Department of Environmental Quality (DEQ)."

In February, 2010, The Alpena News wrote that, "..window of opportunity to build the billion dollar proposed power plant in the Carmeuese Quarry might be shrinking faster than anyone imagined."

According to the article, Eric Baker, president and CEO of Wolverine Power, said the process had "taken a decided slow-down movement", but the company still plans to build the facility.

The article continued, "The window of opportunity is not getting any larger and the state of the economy is definitely not working in our favor. Rogers City, however, remains a world-class site for power generation given the availability of raw materials, lake shipping and the community surrounding the site. We remain committed to this project."

The article stated that Wolverine has concerns that the air quality permit could be delayed for some time, but the company "remains optimistic".

Citizen groups make video about plant
Citizen groups have created a video about the costs Wolverine Power Cooperative members are paying in their electricity bills for the cooperatives to fund carbon capture and clean coal research projects like Wolverine Clean Energy Venture, saying members pay both the construction costs and, later, higher energy prices. The video urges co-op members to vote for board of directors that reflect customer and member interests.

Coal Bottleneck to Continue
All Michigan coal plants will depend to some degree on coal from the Powder River Basin(PRB) in Wyoming. On August 26, 2009, The Dakota Minnesota & Eastern Railroad Corp. put on hold a massive new proposed coal rail line meant to transport coal from the PRB to points east.

The $6 billion railroad from the Wyoming coal fields to the Mississippi River, was meant to open up markets for another 100 million tons of coal annually. For comparison, this would be enough coal to power 50 medium size coal plants which when burned would have emitted 200 million tons of carbon dioxide (think 40 million cars).

Project Details
Sponsor: Wolverine Power Cooperative Location: Rogers City, Michigan Capacity: 600 MW Type: Circulating fluidized bed Projected in service: 2012 Status: Permit approved by Michigan DEQ

Citizen Groups

 * Citizens for Environmental Inquiry, http://www.nemcei.org
 * Michigan Sierra Club, Gayle Miller, gayle.miller [at] sierraclub.org
 * Environment Michigan, info [at] environmentmichigan.org
 * Michigan Energy Alternatives Project, Tom Karas, logman39 [at] hotmail.com.

Related SourceWatch Articles

 * Citizens for Environmental Inquiry
 * Michigan and coal
 * United States and coal
 * Carbon Capture and Storage
 * Existing U.S. Coal Plants
 * US proposed coal plants (both active and cancelled)
 * Coal plants cancelled in 2007
 * Coal plants cancelled in 2008
 * State-by-state guide to information on coal in the United States (or click on the map)